Rio Tinto will expand its iron ore operations in the Pilbara with a $3 billion dollar investment set to create over 2000 jobs in the region.

Rio Tinto announced a massive $3.1 billion expansion to its Pilbara iron ore operations early last year with the majority of the investment used to extend the life of its Nammuldi iron ore mine, with the site receiving a $2 billion boost.

A further $1.1 billion will be used on early works to expand the company's Cape Lambert port and rail facilities including the construction of a 130MW power station at the company's Cape Lambert port and rail facilities.

Premier and State Development Minister Colin Barnett said the Western Australia economy was set to benefit from the investment.

“This major investment by Rio Tinto will create almost 1,500 construction jobs and secure ongoing employment for more than 700 people,” Barnett said.

“The Nammuldi mine, 60km north-west of Tom Price, includes a major investment in mine infrastructure, which will see iron ore mined below the water table and increase the mine’s production limit from eight to 23 million tonnes a year.”

“At Cape Lambert, Rio Tinto will build a state-of-the-art, fuel efficient 130MW power station to feed into Rio Tinto’s integrated power network. This additional power source will help meet the port’s power needs as annual capacity grows from 85 million tonnes to 235 million tonnes by 2015,” he added.